Iraqi Depository Center Regulations on Deposit, Settlement, and Clearing

Iraqi Securities Commission Regulations for 2022 Iraqi Depository Center The System for Deposit, Settlement, and Clearing at the Iraqi Depository Center

Article (1)
a. The listed company, whose shares are traded in the market, is obligated to provide the Iraqi Depository Center with its shareholder register, which includes the names of shareholders, their nationalities, their balances, ownership records on these balances, and all other information related to them, in accordance with the specifications set by the Board. b. After uploading the shareholder register to the Iraqi Depository Center's electronic systems, the Center shall send it to the company for verification against the register held by the company.

Article (2)
a. The company is responsible for the correctness, accuracy, and completeness of the contents of the shareholder register provided by it, and the Iraqi Depository Center bears no responsibility resulting therefrom. b. The Iraqi Depository Center accepts this information as a whole, meaning acceptance of the number of issued shares corresponding to the capital, and does not mean acceptance of the balances of each shareholder except after the Center reviews it through a broker and follows the registration procedures approved by the Board. The receipt of the shareholder register by the Iraqi Depository Center does not constitute an acknowledgment by it of the correctness, accuracy, or completeness of the information and data contained in the register regarding the quantity of shares and any ownership encumbrances on them.

Article (3)
a. No person may open a trading account with any broker and trade financial instruments listed at the Iraqi Depository Center except after obtaining an investor number in accordance with the provisions of this System. b. No more than one investor number may be assigned to each investor.
c. The investor number is issued through the broker or through the Iraqi Depository Center in accordance with the procedures followed.
d. An investor number for a legal entity may not be issued directly by the broker; if the application is submitted to the broker, the broker must submit all required documents and papers to the Center for study and issuance of the number as final.

Iraqi Securities Commission Regulations for 2022

Article (4)
The broker is obligated to keep copies of all documents submitted to it by the investor for the purpose of issuing an investor number, and is also obligated to stamp them to indicate that they are originals.

Article (5)
The Iraqi Depository Center may approve the supervising authority of any public offering to issue numbers to investors applying for the subscription, provided that the controls set by the Iraqi Depository Center for this purpose are adhered to. The supervising authority of the subscription bears the responsibility for issuing these numbers in accordance with the provisions of this System.

Article (6)
a. The broker bears full responsibility that may arise from issuing an investor number to its investor, and the broker is responsible for the correctness of the information and data entered by it regarding its investor on the electronic market systems. b. The broker bears responsibility for the correctness of the signature of its investor confirmed on the investor number request form, and for verifying the identity and capacity of the investor.
c. The Iraqi Depository Center is not responsible for the inaccuracy, incorrectness, or incompleteness of the investor data entered by the broker.

Article (7)
The investor must update the data related to him contained in the investor number request form in the same manner through which his investor number was issued or directly through the market.

Article (8)
a. A person wishing to trade financial instruments listed at the Iraqi Depository Center must open a trading account with one of the brokers. b. No more than one account may be opened for each investor with a single broker, but an investor may open a trading account with more than one broker.
c. The broker opens trading accounts for its clients on the electronic market systems designated for this purpose.

Iraqi Securities Commission Regulations for 2022 d. A trading account may not be opened for any person unless that person has obtained an investor number.

Article (9)
a. The types of trading accounts that can be opened on the electronic market systems are divided as follows:

• Independent trading account, opened in the name of one person only (natural or legal).
• Joint trading account.
  b. An account may not be opened in the name of a deceased person's heir except for the purpose of selling financial instruments registered in the deceased person's name only.

Article (10)
a. No person may trade financial instruments listed in the market unless they have deposited the financial instruments owned by them in their account at the Iraqi Depository Center. b. The deposit of financial instruments in a person's account at the Iraqi Depository Center is done through the Iraqi Depository Center.
c. Financial instruments are deposited according to the following procedures:

• The person submits a request to deposit financial instruments to the Iraqi Depository Center through their broker, along with all documents required by the Center.
• The broker verifies the correctness of the information provided to it.
• The Iraqi Depository Center reviews the documents and sends them to the designated company within one working day.
• The listed company verifies the ownership of the sent financial instruments and the identity and capacity of the person requesting the deposit within a period of two working days.
• After verifying the correctness and integrity of the financial instruments, the listed company immediately deposits them into the investor's account at the Iraqi Depository Center.
• The listed company cancels the share certificates for those financial instruments after completing the procedures.

Iraqi Securities Commission Regulations for 2022

Article (11)
a. The investor may deposit their financial instruments in their account at the Iraqi Depository Center and transfer them or part of them to their account at the broker according to the following procedures:

• The investor submits a request to the broker to transfer a specific number of financial instruments owned by them from their account at the Center to their account at the broker, using the form prescribed for this purpose.
• The broker enters the transfer request data into the Iraqi Depository Center's electronic system and executes the transfer process definitively.
• The broker is obligated to provide the Iraqi Depository Center with the transfer requests or copies thereof if the Center requests it.
  b. Financial instruments purchased on behalf of the investor through any broker are deemed deposited in the investor's account at that broker.

Article (12)
An investor of financial instruments deposited in their account at the broker may transfer them or any part of them to their account at the Iraqi Depository Center according to the following procedures:
a. The investor submits a request to the broker to transfer a specific number of financial instruments owned by them to their account at the Iraqi Depository Center, according to the form prescribed for this purpose. b. The broker enters the transfer request into the system at the Iraqi Depository Center and transfers it definitively.
c. The broker is obligated to execute the transfer process no later than the next working day after receiving the transfer request. The broker may not refuse to transfer the financial instruments owned by the investor to the investor's account at the Iraqi Depository Center unless there are legal grounds for doing so, and the broker bears responsibility for any delay in executing the transfer process.

Article (13)
In the event of the cancellation of investors' registration from the brokers' register, the Iraqi Depository Center shall transfer the financial instruments owned by them to their accounts at the Iraqi Depository Center.

Iraqi Securities Commission Regulations for 2022

Article (14)
a. If the company decides to increase its capital by issuing bonus shares, the Iraqi Depository Center shall transfer these shares directly to the shareholders' accounts at the Iraqi Depository Center. b. If the listed company decides to increase its capital by issuing new shares in accordance with a public offering, the Iraqi Depository Center shall transfer these shares directly to the shareholders' accounts at the Iraqi Depository Center.

Article (15)
The net value of financial instruments is collected and paid to and from brokers through the settlement account, and the Iraqi Depository Center opens and manages this account in accordance with the provisions of this System.

Article (16)
a. Each broker must open a special settlement bank account at the settlement bank in accordance with the provisions of this System. b. The Iraqi Depository Center has the right to inspect the account referred to in paragraph (a) of this Article and obtain a statement of transactions conducted on this account, and the broker is obligated to enable the Iraqi Depository Center to do so.

Article (17)
a. The Iraqi Depository Center calculates, for each trading day and for all brokers, the net amount due to or from the broker on the settlement day. b. The amount referred to in paragraph (a) of this Article is calculated by subtracting the total value of purchases of financial instruments for the trading day from the total value of sales of financial instruments for the same day.

Article (18)
a. The broker may request the Iraqi Depository Center to modify the trading account number in a specific transaction in the event of an input error.

Iraqi Securities Commission Regulations for 2022 b. The Iraqi Depository Center may take all procedures and request any documents it deems necessary to verify that an input error has occurred.
c. The modification request must be submitted within (60) sixty minutes from the end of the trading session. In necessary cases, the Executive Director - with the approval of the Board - may approve modification requests after this time until the end of the settlement process.
d. If the Iraqi Depository Center determines that the modification request was not due to an input error, but rather intended to realize gains or avoid losses for a specific investor, this violation is subject to disciplinary procedures and penalties imposed by the Iraqi Depository Center, and the aforementioned shall be disclosed in the daily trading report.

Article (19)
a. The Managing Director may cancel any transaction executed during a trading session due to a technical failure in the Iraqi Depository Center's systems, and this shall be disclosed in the daily trading report. b. The Iraqi Depository Center is not responsible for compensating any broker or investor resulting from any cancellation in accordance with the provisions of paragraph (a) of this Article.

Article (20)
Brokers are obligated to comply with all regulatory, administrative, and technical procedures established by the Board of Governors and the Managing Director to regulate the trading process at the Iraqi Depository Center, after approval by the Commission.